Search - consideration

The CRA indicated that the monthly equipment rental fees paid by the merchant to DeviceCo were consideration for taxable supplies by DeviceCo. However, the fees paid by the merchant under the Service Agreement were regarded as consideration for the processing of credit and debit card payments within the payments network and, thus, as consideration for exempt supplies of financial services. ...

Bundle Date Translated severed letter Summaries under Summary descriptor 2012-04-27 17 April 2012 External T.I. 2011-0427411E5 F- Bien de remplacement-immobilisation admissible Income Tax Act- Section 14- Subsection 14(7) shares cannot be replacement property 17 April 2012 External T.I. 2012-0440931E5 F- Crédit d'impôt pour frais médicaux Income Tax Regulations- Regulation 5700- Section 5700- Paragraph 5700(i) motorized stationary bicycle did not qualify 2012-04-20 10 April 2012 External T.I. 2011-0428701E5 F- Lien de dépendance- commanditaire et SEC Income Tax Act- Section 251- Subsection 251(1)- Paragraph 251(1)(c) limited partner at arm's length with LP if it has no management authority 10 April 2012 Internal T.I. 2011-0430291I7 F- Montant d'aide versé par la SAAQ à un conjoint Income Tax Act- Section 3- Business Source/Reasonable Expectation of Profit automobile insurance payments received for care of injured spouse were non-taxable 3 April 2012 External T.I. 2011-0426341E5 F- Catégories 29 et 43 Income Tax Regulations- Schedules- Schedule II- Class 29 scrap metal shearing device and container for sliced metal described in Class 29 2011-04-01 23 March 2011 Internal T.I. 2010-0389081I7 F- Disposition of a resource property Income Tax Act- Section 54- Proceeds of Disposition- Paragraph (a) proceeds included full (undiscounted) deferred cash proceeds, but might exclude share consideration (with volatile market price) until issued Income Tax Act- Section 12- Subsection 12(1)- Paragraph 12(1)(g) deferred share consideration potentially not recognized until issuance Income Tax Act- Section 12- Subsection 12(1)- Paragraph 12(1)(b) full undiscounted amount of future cash consideration to be included as an amount receivable Income Tax Act- Section 66.2- Subsection 66.2(5)- cumulative Canadian development expense- Element F proceeds from mineral claims sale included undiscounted deferred cash proceeds, but might exclude share consideration until issued; purchaser’s CEE obligation excluded ...

R & S then appealed to the Tax Court with a view to convincing the Court that the allocation of consideration between partnership-interest and non-partnership interest consideration set out on the (T2059) election form did not reflect the actual agreed allocation. ... Graham J considered that there was a crucial distinction between the T2059’s agreed amounts, which could not be altered by the Minister, and the allocation of the consideration, which was a purely factual matter which was merely recorded on the T2059, and which either CRA or the taxpayer were free to challenge in the Tax Court as not according with the actual facts. ...

24 August 2017- 1:36am CRA considers the HST questions of who has acquired a service or property, and who is the recipient of a supply, to be cognate Email this Content The definition in the ETA of the “recipient” of a supply refers to the person who, under the agreement for a supply, is liable to pay the consideration therefor. CRA indicated that it did not consider someone to be the recipient of a supply merely because that someone was contractually liable to pay the consideration for the supply. ... The [recipient] definition refers to ‘consideration for the supply’. However, in the present case, the [Lessor] has not acquired any supply of software licences, and is therefore not entitled to claim any ITC for the tax paid for them. ...

It seemed likely, but unclear, to CRA, based on the limited information provided to it, that such charges were consideration for the service of the Funds in redeeming the units and, therefore, were exempted under para. (d) of the financial services definition as being consideration for the “transfer of ownership” of financial instruments (i.e., it apparently was sufficient that the unitholders ceased to be owners and that it did not matter that there was no new owner of the units). If, on the other hand, the redemption fees were consideration payable to the Fund manager for its service of “arranging for” the “transfer of ownership” of the units, CRA indicated that this created the possibility that such redemption fees were part of a single supply of taxable management services made by the manager (pursuant to a management agreement between it and the unitholders) for periodic management fees. ...

22 April 2021- 11:04pm CRA indicates that comparable sales of used MURCs for s. 191(3) purposes may reflect embedded GST/HST Email this Content In the context of an inquiry on determining the fair market value of a new apartment building (or other ”MURC”) when there is a self-supply at the time of substantial completion and first occupancy, CRA noted that where the cap rate used in applying the income approach to valuing the MURC was derived from comparable sales of occupied MURCs, such comparables may reflect “GST/HST that may be imbedded in the consideration for a supply as a result of the GST/HST having been imposed at an earlier time.” On the other hand, “where the consideration of a taxable supply of a residential complex is used as a comparable in a valuation methodology, the GST/HST imposed on that supply, even where the supply was ‘GST/HST included’, is excluded from the consideration.” ...

Upon its renewal, the policy is transferred to the employee for no consideration under s. 148(7), whereupon the employee starts paying the annual premiums. Given that the key employee has been including the annual premium in income as a s. 6(1)(a) benefit, does a further benefit arise on such transfer of the policy to the individual for no consideration? CRA indicated that s. 6(1) “may apply to include in the income of the individual the amount by which the fair market value of the policy exceeds any actual consideration paid by the individual for the policy.” ...

7 August 2022- 10:59pm CRA finds that MFT trailer fees paid to a dealer, and by it to its representatives, generally are GST/HST exempt Email this Content CRA indicated that where a dealer, who was a distributor of mutual fund units, received both up-front commissions and trailing commissions from the mutual fund manager, the trailing commissions were generally part of the consideration for the single supply made by the dealer to the manager, namely, arranging for the sale of the units, so that the trailing commissions also were exempt- even though there was an element of on-going servicing of the investors as well. Regarding front end load funds, where the investor is ordinarily charged an upfront fee or commission directly by the dealer upon the initial purchase, but the dealer also receive an ongoing trailing commission from the manager, CRA indicated that if the agreement between the manager and dealer “is for the distribution of units or shares of the fund, the supply made under that agreement by the dealer to the manager would [generally] be one of arranging for a financial service” even though the trailers are the only consideration received. ... CRA indicated that such amounts also were generally exempt consideration for an arranging-for financial service. 217144 is similar, but narrower in scope. ...

The consideration paid by the shareholders would be a proportionate fraction of the property’s nominal appraised value. CRA gave a ruling (albeit, apodictic) that there would be no s. 15(1) (or 246(1)) benefit to the extent that the FMV of the share of the real property so transferred to each shareholder was equal to or less than the FMV of the consideration paid therefor and, on a similar assumption that the aggregate consideration and the property’s FMV did not exceed its ACB, the corporation would not realize a gain. ...

(b) of the definition, because the equity holders of the covered entity (Acquisitionco as the holder of Targetco shares) do not receive equity of Amalco, as such equity is instead cancelled for no consideration. ... (a) of that definition and a portion of the consideration received by a holder for the Targetco shares is not equity consideration described in para. ...